Microsoft Gaming is an American multinational video game and digital entertainment division of Microsoft. Microsoft Gaming produces the Xbox brand of video game consoles and services, in addition to overseeing the production, game development, publishing, research and development, sales (hardware, software, and services) of Xbox and the division's three subsidiaries (publishers) worldwide. The three subsidiaries consist of Xbox Game Studios, ZeniMax Media (Bethesda Softworks acts as publisher), and Activision Blizzard (publishing duties split between Activision, Blizzard Entertainment, and King), each publish games under their own respective labels. CEO Phil Spencer, who has concurrently overseen the Xbox brand since 2014, is the leader of the division.
History[]
Pre-Microsoft Gaming (2001-2021)[]
Up through 2000, Microsoft had only a limited number of video game publishing efforts. With the announcement of the first Xbox in 2000 and its release in 2001, Microsoft established a division for internal development of video games for the Xbox and Windows, then known as Microsoft Game Studios (MGS). The Xbox hardware remained a separate division within Microsoft. After Steve Ballmer's departure as Microsoft's CEO, Microsoft investors attempted to exert pressure on the company to either sell or shut down its gaming business. However, these efforts did not gain significant traction. Microsoft's gaming division, including products such as the Xbox console, has remained a strategic focus for the company. Under the leadership of Satya Nadella, who assumed the role of CEO in 2014, Microsoft has continued to invest in and expand its presence in the gaming market. Since 2009, Microsoft's games operations, including Xbox division, are located at Microsoft West Campus.
MGS made a number of acquisitions of studios to help build out the Xbox software library over its first decade, including Bungie, Lionhead Studios, and Rare while establishing internal studios 343 Industries for Halo development and Turn 10 Studios for Forza games. In 2014 after Satya Nadella was promoted to CEO (combined with the ascension of Phil Spencer to head of Xbox), Microsoft embarked on a new acquisition strategy, starting with the acquisition of Mojang Studios, the developer of Minecraft, for $2.5 billion. Between 2014 and 2019, MGS also acquired several high profile studios, including Ninja Theory, Playground Games, Obsidian Entertainment and inXile Entertainment. These acquisitions were aimed to help position MGS as the company's premier first-party development house comparable to PlayStation Studios for Sony.
Microsoft launched Xbox Game Pass in 2017, marking a pivotal year in which the company reevaluated its strategy to focus on a service-based business model rather than exclusive titles. This strategic shift allowed Microsoft to distinguish itself from other console manufacturers. By prioritizing a service-oriented business model with the Xbox Game Pass, Microsoft differentiated its approach from traditional console strategies that often relied heavily on exclusive game titles to attract users. Instead of competing solely based on exclusive content, Microsoft aimed to offer a broader value proposition to gamers through a subscription service that provided access to a vast library of games. In 2017, Spencer was named Executive Vice President, Gaming at Microsoft.
In 2019, as part of a larger branding, MGS was renamed to Xbox Game Studios (XGS) as to align with the Xbox hardware branding, and further acquired Double Fine. Microsoft acquired ZeniMax Media for $8.1 billion in 2020, the parent company of id Software, MachineGames, Arkane Studios, publisher Bethesda Softworks and others, to further expanding its portfolio of game development studios. ZeniMax remained a separate entity from XGS from its acquisition though overseen by Spencer.
Founding and acquisition of Activision Blizzard (2022-present)[]
Further information: Acquisition of Activision Blizzard by Microsoft
Microsoft announced its proposed acquisition of Activision Blizzard for $68.7 billion in cash on January 18, 2022. Simultaneously, Microsoft announced that Xbox Game Studios, ZeniMax Media and Activision Blizzard will fall under Microsoft Gaming, Microsoft's newly formed gaming division. Microsoft Gaming CEO Phil Spencer stated that one of the primary reasons for acquiring Activision Blizzard is to enter the mobile gaming market. Meanwhile, Activision Blizzard CEO Bobby Kotick mentioned that they accepted the offer to access more talent, capitalize on the growing demand in the gaming industry, and to compete with rising gaming companies from China and Japan. Microsoft Gaming has entered into several 10-year agreements with gaming companies including Sony, Nintendo, Nvidia, Boosteroid, Ubitus, Nware, and EE to bring Call of Duty to their respective platforms over the next decade. Additionally, Microsoft Gaming sold Activision Blizzard's cloud gaming rights to Ubisoft for 15 years due to regulatory pressure from the acquisition of Activision Blizzard. After several regulatory challenges, the deal was closed on October 13, 2023. The total cost of the acquisition amounted to $75.4 billion. This made Microsoft the third largest publisher of video games after Tencent and Sony Interactive Entertainment. On the day the acquisition was announced, Phil Spencer formed the Microsoft Gaming business, taking over as CEO, while Matt Booty headed Xbox Game Studios. Spencer's role includes all Microsoft's global interactive entertainment business across all devices and services. In 2022, ZeniMax Media, acquired Nemesys Games, a Hungarian video game development studio. Following the acquisition, Nemesys Games was officially renamed to ZeniMax Online Studios Hungary.
Shortly after completion of the Activision Blizzard acquisition, Microsoft further reorganized Microsoft Gaming. In this move, the Xbox hardware line was brought into Microsoft Gaming led by Sarah Bond. Matt Booty was made president of game content and studios, which includes oversight of Xbox Game Studios and ZeniMax Media, while Activision Blizzard also remained directly under Spencer, with Bobby Kotick remaining as CEO until the start of 2024 to help with the transition. In an email sent to employees, Bobby Kotick announced that he would leave the Activision Blizzard on December 29, 2023.
Following Bobby Kotick's departure, Activision Blizzard has undergone organizational changes to realign with Microsoft Gaming. Vice Chairman of Activision Blizzard, Thomas Tippl; President of Activision, Rob Kostich; President of Blizzard Entertainment, Mike Ybarra; and President of King, Tjodolf Sommestad, have begun reporting to Matt Booty, President of Game Content and Studios. The leadership teams at Activision, Blizzard Entertainment, and King remained unchanged. CCO Lulu Meservey departed Activision Blizzard on January 31, 2024. After assisting with the transition, Thomas Tippl, along with several other top Activision Blizzard executives, departed from the company in March 2024.
Microsoft Gaming laid off 1,900 staff (approximately 8% of its workforce) in January 2024. Additionally, Blizzard's president Mike Ybarra and Blizzard's co-founder and chief design officer Allen Adham left the company. Blizzard Entertainment reportedly is the organization that is most affected by layoffs. Project Odyssey, a game that Blizzard Entertainment has reportedly been working on for six years, has been cancelled. Toys for Bob and Sledgehammer Games reportedly lost over 30% of their staff due to layoffs. Microsoft Gaming also reportedly laid off the entire internal customer support team of Activision Blizzard and the team dedicated to bringing Xbox games to physical retail. Johanna Faries, the former general manager of the Call of Duty franchise, officially took on the role of the new president of Blizzard Entertainment on January 29, 2024, commencing her position on February 5. Simultaneously, Matt Cox assumed the position of the new general manager of the Call of Duty franchise. In February, Toys for Bob's office closed, and employees will work remotely.
After rumors in early February 2024 that Microsoft was looking to bring its first-party exclusives to either PlayStation 5 or Nintendo Switch, and that Microsoft may be leaving the hardware business, Microsoft held a special installment of the Official Xbox Podcast scheduled on February 15, 2024, to address the future strategy of Microsoft Gaming and Xbox, with Phil Spencer appearing alongside head of Xbox Sarah Bond and Matt Booty, president of Game Content and Studios at Microsoft Gaming. Spencer announced that four Xbox-exclusive games will be released on PlayStation 5 and Nintendo Switch in the future, but specifically stated that these titles would not include Starfield nor Indiana Jones and the Great Circle. Phil Spencer stated that one of the reasons for this decision is to grow the Microsoft Gaming franchises, and he anticipates that in the next 5–10 years, console-exclusive games will be a smaller part of the gaming industry. In addition, the Podcast stated that the next generation of Xbox hardware would likely be discussed in late 2024, and that Microsoft would start bringing Activision Blizzard games to Game Pass, starting with Diablo IV in March 2024. Microsoft Gaming announced that four games will be released on other platforms, namely Pentiment, Hi-Fi Rush, Grounded, and Sea of Thieves. On February 29, 2024, Activision developer Toys for Bob announced their intentions to spin off from the publisher to become an independent studio but confirmed that they were open to working with both Activision and Microsoft on future projects.
On April 9, 2024, Microsoft Gaming and NetEase Games announced an agreement to bring Blizzard Entertainment games back to China. Previously, Blizzard terminated a publishing deal with NetEase in 2022. Microsoft Gaming also revealed plans to bolster their collaboration through a strategic partnership focused on expanding the availability of NetEase video games across various Microsoft Gaming platforms.
Microsoft Gaming shut down three development studios on May 7, 2024: Alpha Dog Games in Canada, Arkane Austin in the US, and Tango Gameworks in Japan. Additionally, Roundhouse Studios will merge with ZeniMax Online Studios in the US. According to Microsoft Gaming, this move is a part of a larger "reprioritization of titles and resources" that Microsoft's gaming division is carrying out. The intention is to boost investment in their library of games and new intellectual assets while focusing on high-impact titles. Some teams have been reassigned to other projects inside Bethesda and ZeniMax, and production on some games has stopped as a result of these companies closing.
In June 2024 during the Xbox Games Showcase, Microsoft announced that the upcoming Doom: The Dark Ages (2025) from id Software would launch simultaneously on multiple platforms, with Spencer detailing that the decision to develop a PS5 version stemmed from the series' prior multiplatform history and persuasion from the developers. Jerret West, Xbox's chief marketing officer, left Microsoft Gaming at the end of June 2024. West led the marketing efforts for the Xbox Series X/S consoles and his team was responsible for developing marketing plans for games, hardware, and Xbox Game Pass. Following his departure, Microsoft is reorganizing some of its marketing teams. A new, expanded central gaming marketing team is set to be created under Kirsten Ward, VP of Xbox integrated marketing. Consequently, games marketing would become a part of the game content and studios division led by Matt Booty, while Xbox marketing, led by Chris Lee, would move to the Xbox organization and report to Xbox president Sarah Bond.
On August 7, 2024, Krafton reached an agreement with Microsoft Gaming to acquire Tango Gameworks as well as the Hi-Fi Rush IP. On August 20, 2024 during Gamescom: Opening Night Live, Microsoft announced that the upcoming Indiana Jones and the Great Circle (2024) from Bethesda and MachineGames, which was originally announced as an Xbox Series X/S console exclusive, would launch on PlayStation 5 in Spring 2025 following its Xbox and PC launch in December 2024. On the decision to pursue a PS5 release for the title after initially amending the licensing terms with Lucasfilm to exclude the platform from distribution plans, Spencer cited the positive reception to the prior four Xbox titles released on other platforms in the earlier half of 2024, in addition to a need to maintain a strong business and interest in their franchises as they work to grow the Xbox ecosystem. Spencer also called to attention that the gaming industry was undergoing changes in the methods by which games were developed and distributed, that Microsoft was prepared to anticipate when considering a more aggressive multiplatform strategy.
In September 2024, Spencer announced another round of layoffs affecting 650 staffers in "corporate and supporting functions" following the acquisition of Activision Blizzard.
Products[]
Video game devices and services[]
- Main article: Xbox
Microsoft Gaming develops and produces the Xbox line of home gaming consoles along with associated peripherals. The company supports the consoles with online services, utilizing the base Xbox network. Since the late 2010s, Microsoft began combining its standard paid subscription service, originally known as Xbox Live Gold, with Xbox Game Pass, which in addition to online multiplayer and matchmaking support, provides subscribers with a rotating library of games to play through the Xbox, on Windows computers, or through cloud gaming.
Video games[]
Main articles: List of Microsoft Gaming video games, List of Xbox Game Studios video games, List of Bethesda Softworks video games, List of Activision video games, List of Blizzard Entertainment games, and List of King games
Among the video game franchises owned by Microsoft Gaming include Call of Duty, Halo, Minecraft, Warcraft, Diablo, StarCraft, Overwatch, The Elder Scrolls, Fallout, Crash Bandicoot, Spyro, Banjo-Kazooie, Battletoads, Killer Instinct, Perfect Dark, Doom, Wolfenstein, Quake, Dishonored, Pillars of Eternity, Wasteland, The Bard's Tale, State of Decay, Hellblade, Gears of War, Fable, Forza, Tony Hawk's, Guitar Hero, Skylanders, Microsoft Flight Simulator, Age of Empires and Candy Crush.
Subsidiaries and studios[]
Xbox Game Studios[]
- Main article: Xbox Game Studios
- 343 Industries
- Compulsion Games
- Double Fine
- inXile Entertainment
- Mojang Studios
- Ninja Theory
- Obsidian Entertainment
- Playground Games
- Rare
- The Coalition
- The Initiative
- Turn 10 Studios
- Undead Labs
- World's Edge
ZeniMax Media[]
- Main article: ZeniMax Media
- Arkane Studios
- Bethesda Softworks
- Bethesda Game Studios
- id Software
- MachineGames
- ZeniMax Online Studios
Activision Blizzard[]
- Main article: Activision Blizzard
Activision
- Beenox
- Demonware
- Digital Legends Entertainment
- Elsewhere Entertainment
- High Moon Studios
- Infinty Ward
- Raven Software
- Sledgehammer Games
- Solid State Studios
- Treyarch
Blizzard Entertainment
King
Major League Gaming
Activision Blizzard Studios
See also[]
References[]
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Wikipedia
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